Home Latest News PIA Offshore Assets Unfrozen by British Virgin Islands in Reko Diq Case

PIA Offshore Assets Unfrozen by British Virgin Islands in Reko Diq Case

by Newsweek Pakistan

Courtesy of Tethyan Copper Company

Attorney General’s Office hails decision as ‘great victory’ of Pakistan’s legal team

The British Virgin Islands High Court on Tuesday withdrew orders that had earlier frozen the offshore assets of Pakistan International Airlines as part of a settlement in the ongoing Reko Diq dispute, giving control back to the airline.

“Pakistan has won the BVI [British Virgin Islands] case initiated by TCC [Tethyan Copper Company] to enforce the ICSID [International Center for Settlement of Investment Disputes] award,” announced the Attorney General’s Office, adding that all ex-parte orders obtained by TCC had been set aside.

TCC had initiated the case for the enforcement of the July 12, 2019, $5.97 billion award against Pakistan by the ICSID over the cancellation of a copper and gold mining license in Reko Diq. In November 2020, TCC approached the BVI High Court for the enforcement of the $6 billion award in the Reko Diq case and on Dec. 16, the court had issued an ex parte order attaching foreign assets of the PIA, including two hotels and 40 percent of PIA’s interest in Minhal Incorporated.

Terming the high court orders as a “great victory for Pakistan,” Attorney General Khalid Jawed Khan said the Roosevelt Hotel in New York and the Scribe Hotel in Paris had both been placed back under PIA’s control. The Attorney General’s Office noted that the High Court had ruled that it no jurisdiction to decide the matter and the receiver appointed had been discharged with immediate effect. TCC has been ordered to pay costs of present proceedings, it added.

It said Prime Minister Imran Khan had also appreciated and lauded the efforts of the International Dispute Unit.

“Justice prevails!” PIA announced on Twitter after the verdict was made public. “By the grace of Allah and with the prayers of all our countrymen, courts in BVI decide in favor of PIA, releasing all hard-earned assets i.e., Roosevelt NYC and Scribe Paris. Great victory for PIA and Pakistan. We won this together!”

Reko Diq case

Former chief justice Iftikhar Muhammad Chaudhry had ruled against TTC in the Reko Diq case in 2013, setting off the series of events that led to the ICSID decision after nearly seven years of litigation.

According to TTC, the Reko Diq Mining Project was to build and operate a copper-gold open-pit mine at a cost of about $3.3 billion. The company claims its 1998 agreement with the Balochistan government entitled it to the mining lease, subject to routine government requirements. The project stalled in November 2011 after the application was rejected, with Pakistani officials claiming the lease was terminated because it was secured in a non-transparent manner.

By then, the company had already invested $220 million in Reko Diq and sought help from the World Bank arbitration tribunal in 2012, which ruled against Pakistan in 2017, rejecting an earlier decision by the Supreme Court. The tribunal used a formula for calculating damages for the cancelled lease based on assumed profits TTC might have earned from the mine over 56 years. In July 2019, the tribunal slapped a $5.97 billion award against Pakistan for revoking the mining lease.

In September, Pakistan won a stay on the enforcement of the award and the ICSID said the stay would continue on a conditional basis, directing Islamabad to provide an “unconditional and irrevocable” bank guarantee or the letter of credit for 25 percent of the award, plus accrued interest as of the date of the decision. Pakistan, however, did not deposit this amount, resulting in TTC seeking payment through the BVI High Court.

Information about the attachment proceedings and the earlier order of the BVI High Court was communicated to Pakistan on Dec. 23, 2020, with the AGP’s Office vowing to vigorously pursue proceedings and protect national assets.

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